Correlation Between Molson Coors and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Molson Coors and Agilent Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Molson Coors and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Beverage and Agilent Technologies, you can compare the effects of market volatilities on Molson Coors and Agilent Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Molson Coors with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Agilent Technologies.
Diversification Opportunities for Molson Coors and Agilent Technologies
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Molson and Agilent is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Molson Coors is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Molson Coors Beverage are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Molson Coors i.e., Molson Coors and Agilent Technologies go up and down completely randomly.
Pair Corralation between Molson Coors and Agilent Technologies
Assuming the 90 days trading horizon Molson Coors Beverage is expected to generate 1.04 times more return on investment than Agilent Technologies. However, Molson Coors is 1.04 times more volatile than Agilent Technologies. It trades about 0.02 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.01 per unit of risk. If you would invest 4,720 in Molson Coors Beverage on October 14, 2024 and sell it today you would earn a total of 638.00 from holding Molson Coors Beverage or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.98% |
| Values | Daily Returns |
Molson Coors Beverage vs. Agilent Technologies
Performance |
| Timeline |
| Molson Coors Beverage |
| Agilent Technologies |
Molson Coors and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Agilent Technologies
The main advantage of trading using opposite Molson Coors and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Agilent Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Molson Coors vs. Dairy Farm International | Molson Coors vs. Bell Food Group | Molson Coors vs. GoldMining | Molson Coors vs. Associated British Foods |
| Agilent Technologies vs. DXC Technology Co | Agilent Technologies vs. Take Two Interactive Software | Agilent Technologies vs. Molson Coors Beverage | Agilent Technologies vs. Sabien Technology Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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